from the this-again? dept

You may recall a few years back, prior to the RIAA embracing the concept of "pre-litigation letters," that DirecTV was a huge proponent of using them. The company had sued some companies that sold smart card readers -- which could be used for a variety of purposes, only one of which was potentially unauthorized access of satellite TV signals. However, DirecTV was still given access to those company's full customer lists, and proceeded to send most of them one of those pre-litigation letters, demanding $3,500 or saying that a lawsuit would be filed. Of course, plenty of buyers had perfectly legitimate reasons for purchasing a smart card reader that had nothing at all to do with pirating satellite TV. But, no matter, pay up or go to court. And, in fact, many people just paid up.

from the that's-not-gonna-hurt dept

Last month we wrote about the strange case of DISH Networks accusing a News Corp subsidiary of hacking its smart cards and distributing them. This seemed really unlikely, as there was little incentive for the company to do so. The company did admit to reverse engineering DISH Networks technology (which is perfectly legal). It appears that a jury wasn't particularly convinced either. It did find the subsidiary guilty of hacking one single smart card, for which the company was fined $49.69 (ouch!), and then the court added another $1000 for "damages." So, technically it's a "victory" for DISH, but probably not to the level it was expecting.

from the seems-a-bit-extreme dept

I had missed this story when it came out last week, but thanks to a reader (who prefers to remain anonymous) for sending it in. Apparently, Dish Network is suing DirecTV, claiming that DirecTV (and its parent News Corp) hired notorious satellite TV hackers to break Dish's encryption and "flood the market" with hacked smart cards. That's quite a claim, and it will be interesting to see what evidence the company has to back it up. After all, reverse engineering a product is perfectly legal -- and, indeed, DirecTV claims that's all it did. Furthermore, it seems doubly strange that DirecTV would go down this route after so thoroughly pissing off smart card hackers of all kinds a few years ago by accusing them all of stealing DirecTV signals with almost no evidence, and then pushing many to pay up to avoid a lawsuit. It's also hard to see what the real benefit to DirecTV is of such a plan. Making it easier to get Dish for free shouldn't increase DirecTV's market at all. One would hope that Dish actually has some serious evidence to go along with these claims.

from the no-surprises-here dept

So the winners of the 700 MHz spectrum auction have been announced and to say that there were no surprises would be an understatement. It played out almost exactly as most observers predicted it would. Verizon Wireless ended up with the C-block (with Google only bidding right up to the cut-off amount to force Verizon to play by "open" rules) and AT&T added some spectrum as well, which it can add to the 700 MHz spectrum it picked up separately last year. The end result? Nothing too exciting for consumers. Whether or not Verizon Wireless's required "openness" makes a difference remains to be seen. What didn't happen was someone new entering the scene -- meaning that we're not going to see anything really new come out of all this spectrum.

In fact, perhaps the most bizarre bid of all was EchoStar spending $700 million on spectrum that can only be used for one-way communication. One-way communication is less and less useful these days. EchoStar has been making some interesting moves of late, but using this spectrum to build a mobile TV broadcast solution (which is what many expect) makes little sense. It will cost the company billions, and then they'll be limited to a one-way communication system just as people are recognizing that the real value is in multi-directional communications. It may give the company another option rather than relying on satellites (which are costly and troublesome at times), but the expense is way too high considering the limitations. So, even with EchoStar, we're talking about "more of the same." That's too bad, as there was a quiet hope that someone different would step in and do something really new and interesting with this valuable spectrum.

from the confusion-reigns dept

Last week, we noted that the GAO was concerned that the FCC didn't have plans in place to educate consumers about the switch from analog TV to digital TV, set to take place in February of 2009. Kevin Martin and the FCC shot back that the GAO was incorrect, and it has an education campaign well planned out. It would appear that's true, but that campaign is already raising some controversy. Reader MaxB312 writes in to point us to a Public Service Announcement that Martin himself filmed for Dish Network:

As the summary of the video makes clear, some people are interpreting this commercial to be a sly way of suggesting that those who have analog TV should just sign up for Dish rather than getting a converter. Martin makes it clear that Dish Network subscribers have nothing to worry about, since this only impacts free over-the-air (FOTA) TV, and then says "but if your TV has rabbit ears or a rooftop antenna, you'll need a satellite box or a converter box." The problem is that you really only "need" a converter box -- not satellite. A satellite box would get you entirely beyond the issue of FOTA TV. Of course, so would a cable service -- which Martin doesn't mention at all. No wonder, since he apparently has it in for cable companies. While I don't necessarily buy the conspiracy theory that this is an attempt to help out satellite providers, it does raise an important question: why is the FCC advertising this to people for whom it won't matter? Why would the FCC put PSAs on either satellite or cable TV offerings when the switch doesn't impact those people at all? Perhaps the GAO's real complaint wasn't that the FCC didn't have a plan on how to educate people -- but that the plan consisted of educating the wrong group of people. Update: Well that answers that. As a bunch of folks noted in the comments, it's mainly targeted at rural areas where the broadcast OTA stations aren't all available via Dish.

from the gotta-make-the-deals-now dept

We were a little confused last month when EchoStar announced plans to buy SlingMedia. Such a deal made some sense for the investors and founders of Sling, looking to cash out -- but at a strategic level it didn't seem to make much sense. Locking Sling into EchoStar seemed unnecessarily limiting, and the benefits to EchoStar of being the sole owner seemed... not all that compelling. However reports quickly came out about the details behind the plan. Basically, EchoStar CEO Charlie Ergen seems to be realizing that the satellite TV business has gone about as far as it can go, and its opportunities for growth aren't all that interesting. However, some of the technology behind what the company is doing is quite interesting, and when you combine that technology component with Sling, you potentially get something very interesting. The problem, though, is that you need to shed the whole satellite TV albatross legacy business. And who better to dump a dying business on than a massive telco who has trouble understanding business trends. Hello... AT&T... step right up. Indeed, the talk is now getting much louder that AT&T plans to buy EchoStar shortly in order to get approval from a friendly DOJ before a change in Presidential administrations could perhaps make it less business friendly. If true, then this sounds like a great deal for Ergen and EchoStar, who ditch the loser part of their business to focus on the growth part.

As for AT&T, initially, I would say that it's a bad deal, but that might not necessarily be the case due to its own problems elsewhere. AT&T flirted with buying DirecTV in 2003 and EchoStar in 2005. The company did invest in EchoStar, and already offers a bundled package. However, as we pointed out during the original EchoStar rumors, the combination doesn't seem to make much sense. If AT&T is really pushing for a triple play offering, they should focus on doing that all through a single pipe (as with its U-Verse offering), rather than getting tied up with the limitations of satellite. So why would it make sense? If AT&T's U-verse plans aren't going particularly well. In such a case, AT&T could buy EchoStar to get its hands on all of the pay-TV customers and hope that those customers can easily be transferred over to IPTV when AT&T finally figures out how to offer it more broadly. It would be about buying customers, not technology (the good technology would stay with Ergen anyway), squeezing some life out of the legacy satellite business and then casting it off and transferring everyone over to fiber. At least, that's the only way the plan makes any sense -- and it would still require AT&T be able to successfully convert DISH customers to U-Verse, which may not be particularly easy.

from the might-scare-off-others dept

Late Monday, the news came out that EchoStar was buying Sling Media for $380 million in cash and stock. It's not surprising that Sling would go for such a deal, but it's a pretty wide open question as to whether or not this move will hurt Sling's prospects. EchoStar had already been an early investors in Sling, but in buying the entire company outright, it might make it that much harder for Sling to work with other providers, who might not want to be seen supporting the "competition." Also, since Sling isn't EchoStar's main business, if the company comes on hard times, it may not devote enough resources to keeping Sling moving forward. Finally, there were already plenty of companies who were upset about how the Slingbox enables placeshifting. There have been occasional threats of lawsuits from organizations like HBO and Major League Baseball. While Sling has pretty strong defenses for why the Slingbox is legal, now that there's a big company with a lot of money behind it, it becomes a much more attractive lawsuit target. In fact, it wouldn't be surprising to see lawsuits start to fly against Sling and EchoStar rather rapidly. All in all, it makes you wonder if Sling Media is actually worth a lot less as a part of EchoStar than independent. That doesn't mean it's a bad deal for the folks at Sling, who have a great opportunity to cash out -- but it could potentially slow down the innovation coming out of the company.